This paper describes the significant cost saving opportunities for consumers in developing countries by the use of a simple non-cooperative game theoretic mathematical model for demandside management techniques to mitigate the massive use of diesel back-up during grid outages and also other cost optimization schemes. Application of real time load scheduling optimization is
investigated during power outages, for residential consumer in India. This method involves a beautiful formulation of a non–cooperation behavior between the diesel generator & the residential consumer during power outages. This involves a tree model with a two player game, where in player one is the diesel generator & player two is the consumer. Depending on the duration of the outage & the consumers limit on the cost for energy different cost optimization strategies can be generated. The load types modeled include passive loads and schedulable, i.e. typically heavy loads. It is found that this DSM schemes show excellent benefits to the consumer. The maximum diesel savings for the consumer due to strategy formulation can be approximately ranging from 45% to as high as 75% for a flat-tariff grid. The study also showed that the actual savings potential depends on the timing of power outage, duration and the specific load characteristics.